MANOJ GAJANAN PATIL,MUMBAI vs. ITO WARD 3(1), KALYAN

At the outset, it has been noticed that there is a delay of 30 days in filing of the present appeal before the Tribunal. In support of the petition for condonation of delay, the assessee has filed an affidavit explaining the circumstances under which the appeal could not be filed within the prescribed period of limitation. From the averments made in the affidavit, it has been stated that the assessee is an agriculturist by occupation and carries on farming activities for his livelihood. It has further been stated that he has very limited knowledge of English language and is not conversant with technical legal procedures and faceless appellate mechanism. According to the assessee, after passing of the assessment order dated 11.03.2025, he had filed appeal before the learned CIT(A) with the assistance of his consultant. However, the appellate proceedings before the learned CIT(A) culminated in an ex parte order dated 24.09.2025.

It has further been explained in the affidavit that the consultant, upon subsequently examining the records and assessment order in detail, realized that the assessee had purchased agricultural land for a consideration of Rs.38,10,000/- and was prima facie eligible for deduction under section 54B, though such claim had inadvertently not

After considering the explanation furnished in the affidavit and the overall facts and circumstances brought on record, we find that the delay in filing the appeal was neither deliberate nor attributable to any mala fide intention on the part of the assessee. The explanation furnished appears to be bona fide and supported by surrounding circumstances emerging from the records. It is a settled principle of law that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to prevail, especially where the delay is short and reasonable explanation has been furnished. Accordingly, considering the entirety of the facts and circumstances, the delay of 30 days in filing the present appeal is condoned and the appeal is admitted for adjudication on merits.

The brief facts borne out from the record are that the assessee and his family had sold ancestral agricultural land during the relevant previous year vide agreement dated 31st May, 2019. According to the assessee, being an agriculturist and a layman not well versed with tax laws, he was under a general understanding that reinvestment in agricultural land would entitle him to relief from capital gains tax and accordingly new agricultural land was purchased for Rs.38,10,000/-. However, due to lack of proper legal understanding and guidance, the claim under section 54B remained omitted from the return as well as from the assessment proceedings. Thereafter, the assessment under section 147 read with section 144 was completed on

The assessee thereafter preferred appeal before the learned CIT(A). However, as stated in the written submissions, initially adjournment was sought as the consultant was occupied with audit assignments. Subsequently, according to the assessee, notices issued during faceless appellate proceedings could not be properly complied with and eventually the learned CIT(A) passed the impugned order ex parte on 24.09.2025 without adjudicating the claim of deduction under section 54B on merits. It has also been brought on record that the factum of purchase of agricultural land itself finds mention in the assessment records and the assessee has already moved an application for admission of additional evidence before the Tribunal.

We have carefully considered the rival submissions and perused the material available on record including the affidavit and written submissions filed before us. From the perusal of the impugned appellate order, it is seen that the learned CIT(A) has disposed of the appeal ex parte without proper examination of the claim now sought to be raised by the assessee under section 54B. The assessee has consistently maintained before us that he had purchased agricultural land out of sale proceeds of agricultural land and

In our considered opinion, the issue raised by the assessee goes to the root of determination of taxable capital gains and requires proper factual verification regarding fulfillment of conditions prescribed under section 54B. The appellate proceedings before the learned CIT(A), having culminated in an ex parte order, deprived the assessee of effective adjudication on merits. The powers of appellate authorities under the Act are wide enough to ensure that legitimate claims are examined in accordance with law so as to determine correct tax liability. Merely because the assessee failed to properly raise the claim at the earlier stage, the same cannot be shut out without proper examination, particularly when supporting material is sought to be brought on record.

Considering the entirety of the facts and circumstances, and in the interest of substantial justice, we deem it fit and proper to set aside the impugned order passed by the learned CIT(A) and restore the matter back to his file for adjudication afresh. The learned CIT(A) shall examine the assessee’s claim for deduction under section 54B after considering the affidavit, written submissions, additional evidences and all

The assessee is also directed to fully cooperate in the appellate proceedings and furnish all necessary evidences and details as may be called for by the learned CIT(A) for proper adjudication of the claim.

In the result, the appeal of the assessee is allowed for statistical purposes.